It’s been another big week in biotech. Some of the biggest companies in the space have taken double digit hits on policy expectations, and others have gained triple digits on positive topline. Thursday’s session proved no exception, and threw out a number of volatility shocks. Here are two of the day’s biggest movers, alongside a look at what drove the action in each.

First up, let’s look at Axsome Therapeutics Inc (NASDAQ:AXSM). We’ve seen it a few times in these sort of pieces where a company shifts unexpectedly on no real news, or even shifts counter to what a fundamental bias might infer. Axsome looks to be another move of this type. For those not familiar with the company, it’s a development stage biotech that went public through a pretty mild IPO last November, with a pipeline that centers around pain management and central nervous system (CNS) conditions. Its lead candidate, AXS-05, is a treatment resistant depression indication, and the company just announced it had kicked off a phase III for the drug yesterday morning. And therein lies the contradictory nature of the volatility in Axsome’s market capitalization across Thursday’s US session. The dosing of a patient in a pivotal should generally be good news, and in turn, should offer up some bullish momentum. The company opened the session at $10.75 a share. At the day’s close, it traded for just shy of $9 a share – a 17% decline across the period.

So there’s room for a recovery if the trial goes well? Yes, and it’s a pretty short trial, so said recovery could come pretty soon. Its an interesting design – patients will spend six weeks taking an already approved SOC depression drug called bupropion. The patients that don’t respond (as measured by what’s called the Montgomery-Åsberg Depression Rating Scale (MADRS)) will carry through to a second stage, within which half of the patients will continue to take bupropion, and the other half will move on to Axsome’s candidate, AXS-05. It’s double blinded, so patients won’t know whether they are on the trial drug or not, and the second stage will also last six weeks. If all goes well, therefore, we could be looking at trial completion, and topline, during the third quarter of this year.

Capitalization is a risk heading into the second half of the year, so due diligence is important before committing to a position, but one to keep an eye on going forward.

Next, Vitae Pharmaceuticals Inc (NASDAQ:VTAE). This one’s far more straightforward the Axsome. On Thursday morning, the company opened the session at $4.11. At close, it traded for $6.79 – a 65% gain. The gains come on the back of a positive data release – specifically, some phase 2 data from its lead psoriasis candidate, VTP-43742.

The drug hit its primary endpoint of efficacy in the phase IIa trial, and also proved on form for tolerability and safety. Vitae is setting up a second part of the phase II, a phase IIb, which will see the drug tested against the same endpoints (with more of a focus on efficacy this time around) in an expanded patient population, and across a longer time frame – this time 16 weeks, rather than the previous eight.

Vitae has had a pretty tough start to the year, and both the company and its shareholders will be happy that the latest data has offered some sort of relief from the overarching decline seen across the last few months. At December close, the company traded for a little over $18 a share. Against a backdrop of wider market weakness, and with capital markets weak on global sentiment fears, it fell to a little over $4 a share at the beginning of this week. The latest boost corrects some of that decline, but there’s still a ways to go before we can call it a recovery. Keep an eye out for the phase IIb initiation, and some in depth topline from the phase IIa, as potential upside catalysts as we head into the second quarter.

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